On Thursday, JMP Securities adjusted its outlook on Spruce Biosciences, Inc. (NASDAQ:SPRB), reducing the price target to $3.00 from the previous $8.00 while maintaining a Market Outperform rating.
The adjustment follows the CAHmelia-203 trial results for tildacerfont, Spruce Biosciences' drug candidate for congenital adrenal hyperplasia (CAH), which did not demonstrate the expected effect on adrenocorticotropic hormone (ACTH) levels, also known as A4.
The CAHmelia-203 trial results revealed a lack of impact on A4 levels, which was attributed to a combination of low patient compliance and potentially insufficient dosing.
Approximately half of the trial's participants displayed less than 80% compliance with the drug regimen. The trial targeted a population with baseline A4 levels approximately five times the upper limit of normal (ULN), which was considered difficult to treat.
Despite these setbacks, JMP Securities remains optimistic about the upcoming CAHmelia-204 trial, noting improved compliance in this patient group. The CAHmelia-204 trial is set to read out in the third quarter of 2024.
The firm highlighted that the Phase 2a CAHmelia-202 trial had shown a 55% reduction in A4 after 12 weeks with high compliance rates, suggesting that better adherence to the treatment regimen could lead to more positive outcomes.
The firm also indicated that further data expected to be released potentially at the ENDO conference in June could provide additional insights into the exposure/response correlation from the CAHmelia-203 trial. This information could be crucial ahead of the CAHmelia-204 trial results.
Spruce Biosciences may need to conduct another adult trial for approval, with plans for an end-of-Phase 2 meeting with regulatory authorities in the first quarter of 2025. The company has been granted clearance to test a higher 400 mg twice daily dose in an ongoing pediatric trial, which could offer further understanding of the optimal dosing required for efficacy.
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